What is the term for the planned acceptance of losses managed internally through deductibles on insurance policies?

The term that describes the planned acceptance of losses managed internally through deductibles on insurance policies is known as "Active Retention." This concept refers to a strategy where an individual or organization consciously decides to retain a portion of risk rather than transferring it entirely to an insurance company. By utilizing deductibles, an insured party agrees to cover a certain amount of loss before the insurance coverage kicks in.

This practice is often employed as a cost-saving measure, as higher deductibles can lead to lower insurance premiums. Active Retention indicates a proactive approach to managing risks, where the insured party prepares for potential losses by setting aside funds or reserves to cover those losses. It emphasizes control over risk management rather than completely shifting the financial burden of losses to an insurer.

In contrast, other terms in the options hold different meanings—Risk Avoidance pertains to completely steering clear of certain risks, Loss Transfer involves passing the risk to another entity (like insurance), and Claims Management focuses on the process of handling and settling claims made against an insurance policy. Understanding these distinctions clarifies why Active Retention is the term that relates specifically to managing losses through deductibles.